Govt. may extend PLI scheme to chemicals, petrochemicals

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Last Updated29/07/2023

Recently, the Finance Minister said the government is open to introducing a production-linked incentive (PLI) scheme for investments in the chemicals and petrochemicals sectors.

The PLI scheme was conceived to scale up domestic manufacturing capability, accompanied by higher import substitution and employment generation.
Launched in March 2020, the scheme initially targeted three industries:
- Mobile and allied Component Manufacturing
- Electrical Component Manufacturing and
- Medical Devices
So far, the government has announced PLI schemes for 14 sectors.

To reduce India’s dependence on China and other foreign countries.
It supports the labour-intensive sectors and aims to increase the employment ratio in India.
Reduce the import bills and boost up domestic production.
However, PLI Yojana invites foreign companies to set up their units in India and encourages domestic enterprises to expand their production units.

The incentives, calculated on the basis of incremental sales, range from as low as 1% for the electronics and technology products to as high as 20% for the manufacturing of critical key starting drugs and certain drug intermediaries.
In some sectors such as advanced chemistry cell batteries, textile products and the drone industry, the incentive to be given will be calculated on the basis of sales, performance and local value addition done over the period of five years.